Coal DMO target unlikely to be met

Petromindo|Lucky

Domestic coal sales volume target this year of 107.92 million tons, as set under the government?s domestic market obligation (DMO) policy, is unlikely to be met amid slower demand from industries particularly power plants, Kontan reported on Tuesday.

The paper said that according to data from the Ministry of Energy and Mineral Resources, the DMO volume as per end September 2017 stood at only 71.86 million tons.

Under the DMO policy, coal miners are obliged to allocate part of their output to the domestic market particularly to meet demand from coal-fired power plants both those owned by state electricity firm PT PLN and independent power producers, and from other industries such as cement. This year?s DMO volume has been set at 107.92 million tons, or about 26 percent of the full-year coal output projection.

Executive Director of the Indonesia Coal Mining Association, Hendra Sinadia said that the full-year coal DMO target is unlikely to be realized. He said that this is because of weaker demand in the domestic market particularly due to slower progress of coal-fired power plant projects and lower demand from other industries.

He said that the lower DMO is not because of coal miners? preference to export the commodity, whose price has risen to more than US$90 per ton.

Meanwhile, Ministry of Energy and Mineral Resources Spokesman Dadan Kusdiana said that coal consumption by domestic industries notably power plants is expected to accelerate in the remaining months of this year, adding that realized DMO volume for the full-year is expected to be more than 90 percent of the target. (*)